May 8, 2008 (Press Release) - The U.S. Department of Commerce yesterday announced a preliminary decision in its antidumping investigation of imports of lightweight thermal paper from China and Germany. The Department affirmed that certain Chinese producers and exporters of lightweight thermal paper sold the product in the United States at prices below fair value and imposed preliminary duties of 132.95% on those products. One of the Chinese producers will receive a duty of 2.3%. The Department also affirmed the certain German producers and exporters of lightweight thermal paper sold that product in the U.S. at prices below fair value and imposed preliminary duties on those imports 6.49%.

"We appreciate the consideration and review given to our cases so far by the Department of Commerce and the U.S. International Trade Commission," said Mark Richards, Appleton's chief executive officer. "We are encouraged by today's Commerce Department preliminary rulings because these help level the playing field on which to compete. We trust that the ongoing reviews and audits of market data by these agencies will confirm our assertions of unfair market conditions and that their final decisions will address those inequities."

The Commerce Department is currently scheduled to make final determinations on or around July 21 concerning imposing countervailing duties on imports of lightweight thermal paper from China and imposing antidumping duties on imports of lightweight thermal paper from China and Germany, though this date could be extended until approximately September 18. The U.S. International Trade Commission will issue its final decision approximately 45 days after the Commerce Department decisions.

On March 10, the U.S. Department of Commerce announced its preliminary decision to apply the U.S. anti-subsidy law to imports of lightweight thermal paper from China. That decision determined that certain Chinese producers and exporters of lightweight thermal paper received countervailable subsidies as high as 59.5%. Subsidies can take many forms such as direct cash payments, preferential tax breaks, loans at terms that do not reflect market considerations and subsidized inputs. The amount of subsidies the foreign producer receives from the government is the basis for the subsidy rate by which the subsidy is offset or "countervailed."

BACKGROUND

In September 2007, Appleton filed petitions with the U.S. Department of Commerce and the U.S. International Trade Commission alleging that the Chinese government is subsidizing the Chinese lightweight thermal paper industry. Foreign governments subsidize industries when they provide financial or other assistance to benefit the production, manufacture or exportation of goods.

Appleton also alleged in its petitions that lightweight thermal paper products, typically used for point-of-sale retail receipts and coupons, imported from China and Germany are being wrongfully dumped in the United States. Dumping occurs when a foreign producer sells goods in the United States at prices below fair value. Appleton asked the Department of Commerce and the International Trade Commission to impose offsetting duties on lightweight thermal paper products imported from those countries.